by Daniel Mitchell

Maximising IT Investment adds up to a safer future for accountants

Nov 27, 20114 mins
Financial Services IndustryIT StrategyMobile Apps

The economic climate has led many companies to question the benefits of IT spend and whether the financial outlay can justify the return.

Market economics have, on the whole, forced businesses to reduce their IT spend – whether in-house or outsourced. The CBI warned in June last year that IT budgets were likely to flat line until 2011, and our own research backed this up, showing that two-thirds of companies had reduced their IT spend in the last 12 months.

Clearly, certain sectors have been hit harder than others. Not surprisingly, IT spending in retail has dropped – only in the summer, it was announced that IT budgets had been reduced to a record low of 1 per cent of sales following another year of cutbacks.

But it isn’t all doom and gloom for the IT industry. There are some business sectors that are bucking the trend to reduce IT costs and are instead actually increasing investment in order to follow best practice. One of these is the accountancy sector, which is opting to outsource more of its IT functions than operate it in-house.

Accountants were early adopters of technology, embracing remote working and home working, which has led to a greater need within the industry for robust, reliable and secure IT infrastructure.

Making the decision to use external expertise has been beneficial to the growth and development of SRLV, a top 60 UK accounting practice. The 100-strong company has outsourced all its IT functions – hardware, software and consultancy – for more than 10 years.

Explained Laurence Finger, Managing Partner at SRLV: “We’ve outsourced our IT for some time now. The biggest advantage is that our supplier remains up-to-date on technology and can be pro-active, always suggesting systems or hardware that can improve the way we do business. It’s also an added advantage that the company we use has worked in the financial services world and understands how we operate – it saves us time having to explain how we do business.”

The Institute of Chartered Accountants in England and Wales (ICAEW), which represents the finance industry, believes IT is critical to business. The organisation supports over 136,000 chartered accountants around the world, offering technical knowledge, skills, expertise and global insight and leadership.

Richard Anning, Head of the ICAEW’s IT Faculty, explained: “Government legislation has been a key accelerator in accountants’ heavy reliance on technology. For example, HMRC now requires all corporation tax to be submitted on-line within a specialised iXBRL format, which accountants have to be familiar with.”

Securityis a major issue for the sector, due to the nature of the sensitive financial data they handle. Accountants may also be managing the financial affairs of high-profile clients that could make them vulnerable to attacks.

It is therefore not surprising that the sector has been slow to embrace the Cloud. In a recent survey of 700 ICAEW members, only three per cent admitted using a cloud-based accounting system.

Explained Anning: “Accountants are very risk averse – it’s ingrained in them from the very start of their training. There is just too much unknown about the security of cloud at this stage and the majority of accountants cannot afford to take that risk.”

Another area where there is a greater reliance on IT is the property sector. Although the industry was a relatively late adopter of IT tools, technology is now crucial to its operations, especially in retail property.

This is evident in one of the UK’s leading retail property consultancies, Briant Champion Long (BCL), whose agency, investment, and professional teams advise on high street shops, shopping centres, superstores and leisure property throughout Central London and the UK.

Explained Dan Simms, a Partner at BCL: “IT and technology is now completely central to everything we do here at BCL. Property is all about information, data and pricing and in the fast moving world of retail, you need to have this at your fingertips.”

BCL advises landlords and retailers on nearly 1000 transactions each year and the need for reliable IT infrastructure is vital. The business outsources all its IT to a specialist supplier.

Added Simms: “It wasn’t that long ago that the industry would work from huge documents of paperwork to complete transactions, but it’s quickly adopted new ways of working to be more efficient in the way it does business. Naturally, it goes without saying that security is key, especially as we are handling commercially sensitive information.”

About the author:

Daniel is a founder and director of Lifeline IT, a network support company specialising in managing IT services for retail, accountancy and property sectors. Daniel has specialist interest in global cyber security, IT and data protection and the management of corporate networks.